Mortgage Calculator

Managing you Mortgage Payments

One of the best things you can do while house hunting is to make use of a Mortgage Calculator! Why? Well, that little bit of time spent figuring out your monthly payment can tell you a lot about whether you will be living comfortably with your new home purchase and your new mortgage payment.

Loan Amount $

Annual Interest Rate

%

Term of Loan

Years

Number of Payments

Monthly Payment $

Total Paid $

Interest Paid $

If you've been renting for a long time and are used to a certain level of monthly income being allocated for "housing", using a Mortgage Calculator will show you if the new mortgage payment will be in line with what you've been paying to date. You might be surprised that the bank has allowed you a mortgage amount that would substantially increase your monthly payments! This is a relatively common experience.

Most banks will approve you for between 4 and 6 times your annual salary, depending on your credit history and other factors. If you then select to have a shorter amortization period (in order to save interest dollars) you can end up with a much larger monthly commitment than you currently have.

The challenge with this is that you'll also be responsible for maintenance on your new home, all utilities on your new home, and municipal taxes. You'll need some extra money in order to meet these obligations. So a much higher monthly payment may not be in your best interest, even if you can qualify for the mortgage.

You may also find that your trusted real estate agent is suggesting you spend a bit more and get a bigger house. While that agent may be trying to help, you may end up in a pickle. After all, the agent won't be paying your mortgage payments after you buy; you will.

Frankly, you may also decide you just don't want to spend that much on housing because you also enjoy other hobbies or activities. This is perfectly acceptable too. You've likely heard the expression "house poor". These are folks who have given up nights out with their spouse, vacations in the summer, and other niceties of life, in order to pay for their home. While a good idea in theory, it can take away from your overall enjoyment of life. This could be a consideration for you.

Our mortgage calculator tools are designed to really help in your overall thinking process when buying a house. Not only will you be able to figure out your monthly payments, you'll also be able to check the effects of lengthening or shortening your amortization (the total length of time it will take to completely pay off your mortgage) as well as a tool that will help you to determine for yourself how much you can afford. Your bank will use some standard ratios when deciding an amount to pre-approve you for. But your unique circumstances may be different. Perhaps your food bill is higher per month because your children have certain allergies. Perhaps you are helping to support an elderly parent. Perhaps someone in your family has a medical condition that requires a costly medicine. These are all factors in how much you can really afford, regardless of your credit rating (which may be excellent) or "average" amounts spent by others on the same categories of spending.

So, take a look at our tools and work through some numbers for yourself.